Ondas Falls 5% Despite $165 Million in New Orders; AeroVironment and Red Cat Drop 5%
Ondas just announced a massive wave of new orders spanning multiple regions and programs, yet its stock is falling in lockstep with rivals that said nothing at all. Something bigger than one company's bookings is driving this drone selloff.
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A burst of new business at Ondas Inc. (NASDAQ:ONDS) is running straight into a sector-wide selloff. Ondas stated it secured more than $165 million in aggregate new orders since its last update, and that bookings since the end of June now total more than $270 million. The drone group is being sold together, and Ondas stock is going with it.
Ondas stock is down 5% to $7.03 in afternoon trading, and the order news is offering no visible support.
Checking in on the peers, AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) stock is falling 5% to $136.09, almost exactly matching the decline in Ondas stock. Red Cat Holdings (NASDAQ:RCAT) stock is also sliding 5% to $6.01, leaving three defense drone names with nearly identical losses.
Meanwhile, the Defiance Drone and Modern Warfare ETF (NYSEARCA:JEDI) is down 4% to $24.11. For a broad-market gauge, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is falling just 0.3% to $776.73. That spread places the pressure directly on Ondas and its drone rivals, because the broad market is barely lower.
Ondas Orders Span Geographies and Programs
Ondas stated the order activity was broad-based across regions and product categories, expanding the company’s backlog and extending revenue visibility into next year. The company also cited customer and program validation milestones, including progress on ULTRA (a candidate to become a U.S. defense program of record) and on IonStrike. An award for electronic safe and arm devices, captured through a European customer in the loitering munitions market, rounded out the Ondas update.
Chairman and CEO Eric Brock stated that the strength and breadth of the order activity demonstrate increasing demand across the Ondas portfolio, and added that both ULTRA and IonStrike are advancing through validation milestones the company believes can open substantially larger markets.
The declines in AeroVironment stock (5.19%) and Red Cat stock (5.21%) bracket the 5.2% slide in Ondas shares almost exactly. Even with a company-specific announcement in hand, Ondas stock is showing no separation from two rivals that reported nothing. Order news at Ondas left the group’s pricing unchanged.
Orders Versus Revenue at Ondas
Ondas stock bulls argue that orders are the leading indicator in defense procurement. Customers are choosing this company. Adding this much to its order book in a single quarter, whatever the share price is doing, shows demand that eventually feeds future revenue.
On the bearish side, an order is a promise and revenue is a result. The market has watched the Ondas backlog grow without yet seeing the conversion. AeroVironment and Red Cat shares are down by nearly the same amount with no announcement at all, which reinforces the point.
What to Watch Next
For Ondas, the key variable is how quickly the backlog converts to recognized revenue, because order announcements have stopped moving the shares on their own. Investors should track progress on the ULTRA and IonStrike programs and may want to keeps their ONDS share exposure minimal for now.
A key question is whether the Defiance Drone and Modern Warfare ETF stabilizes. A recovery in the JEDI fund could signal that selling across Ondas, AeroVironment and Red Cat is easing.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
